Major processor could be fined over $3 billion for its role in Brazilian meat scandal

The controlling shareholder in a major Brazilian meat processing company, JBS SA, could be fined over $3 billion for its role in massive corruption scandals earlier this year.

Federal prosecutors in Brazil reportedly made a new offer to JBS SA’s controlling shareholder, J&F Investimentos, according to Reuters.

The most recent leniency fine offer requested that J&F pay a fine equating to $3.37 billion, for its role in the corruption scandals, Reuters added.

The new offer is believed to be reduced slightly from the previous proposal by prosecutors, that J&F pay the equivalent of a $3.44 billion fine.

Prosecutors have reportedly rejected counter offers of $1.23 billion and $2.36 billion respectively from J&F.

Reuters reported that these negotiations around a leniency deal fine follow revelations from J&F’s owners, Joesley and Wesley Batista, that they spent approximately $184.2 million to bribe nearly 1,900 politicians in recent years.

Brazilian rules for corporate leniency deals call for fines of somewhere between 0.1% and 20% of annual sales, Reuters added.

President of Brazil embroiled in corruption scandal

Joesley Batista is also reportedly at the center of a corruption investigation into the current President of Brazil, Michel Temer.

Batista is believed to have recorded a conversation with President Temer in March of this year. In the recording, it is alleged that President Temer seems to condone bribing a potential witness in the corruption case, according to Reuters.

A corruption investigation into President Temer has been authorised, based on that recording as well as the testimony the Batista brothers and five other executives from their company gave regarding the president and several other powerful politicians, Reuters added.

It also reported that shares of JBS SA have slid by more 20% since mid-May, over concerns that repercussions from the scandal could ‘limit its funding options’.

The news of the major Brazilian meat scandal broke in mid-March when federal agents raided the operations of Brazil’s largest food companies.

Employees of these companies were accused of bribing inspectors to allow rotten meals to be served in public schools and for salmonella-contaminated meat to be exported to Europe.

The so-called ‘Weak Flesh‘ investigation, which spanned over a number of years, broke on March 17; it caused a total of 45 nations to implement some kind of restrictions on imports from Brazil.